The Haifa district court will hear on Wednesday the claim of an Israeli Arab against the largest Arab bank in the world, the Jordan-based Arab Bank, for withholding money deposited when the bank was operating in pre-state Israel under different ownership, reported Haaretz newspaper Friday.

As well as the private lawsuit, the prosecutor is seeking to submit a class action representing hundreds, maybe thousands, of Israeli Arabs "in the same predicament," said the paper.

The bank, which has a branch in Ramallah, is being represented by the law office of Herzog, Ne'eman and associates.

According to the report, the plaintiff, Naim Makhoul (76), a widower with five adult children, is a resident of the small village of Makhoul, near Peki'in. Before retiring Makhoul had worked as a teacher and journalist.

Now he is a farmer.

In 1947, his wife's father, Adib Sa'ada Khoury, opened an account for his only daughter, Antoinette, and deposited the sum of 1,000 Palestine pounds. He also bought bank stock. That year, Khoury died.

After the war of 1948, the bank halted its activities in Israel and its owner, Abdul Hameed Shoman, "went into exile" as the official history of the bank puts it. In November 1949, it became a corporation and received a license from the Jordanian authorities to operate as a bank in Amman.

In 1954, after the armistice agreement which made it possible for Christian Arabs from Israel to visit the holy places in Jordanian territory, including the West Bank, Khoury's widow, Balajiya, crossed through the Mandelbaum Gate in Jerusalem.

She presented herself at the branch of Arab Bank in Ramallah - her daughter, Antoinette, had given her power of attorney to withdraw the money deposited in her name.

The bank turned her down on the grounds that the Jordanian authorities had frozen all assets in Jordan belonging to residents and citizens of the enemy Israel.

That year, Naim Makhoul married Antoinette Khoury. Makhoul went to the bank in Ramallah in 1961, and again in 1967. Each time, his request to withdraw his wife's money was rejected for the same reason - all accounts belonging to citizens of an enemy country had been frozen.

Antoinette Khoury-Makhoul died in 1984. In 1990, Arab Bank in Amman notified the governor of the Central Bank of Jordan that in 1984, it had cashed the stock holdings of Balajiya Khoury and paid a representative of one of her heirs the sum of 23,980 Jordanian dinars. It confirmed that the sum of 1,000 Palestine pounds still appeared in its records under the name of Antoinette Makhoul-Khoury.

Naim Makhoul said this week he has no idea who pocketed the money from the stocks.

In 1995, Antoinette Khoury-Makhoul's will was probated. Half her estate went to Naim Makhoul and the rest was divided equally among her five children. In 1996, two years after Israel and Jordan signed a peace treaty, Makhoul wrote to Arab Bank in Amman and requested that his late wife's money be paid to him according to its current worth.

The manager of the bank wrote back that he was only prepared to pay 1,000 Jordanian dinars - without the interest accrued while the money sat in the bank for nearly 50 years.

"I told a representative of the bank that this was a ridiculous sum, totally out of proportion to the value of the money when it was deposited," said Makhoul this week. "I said they could stick their letter in the water and drink the juice, as the Arabs say," he told the daily.

In March this year, Makhoul's attorney, Halim Makhoul of Nahariya, applied to the district court in Haifa, demanding that Arab Bank in Ramallah pay his client the sum of NIS 1,500,000, or compensation as ordered by the court.

"In 1947, 1,000 Palestine pounds could buy 20 brand new cars or a fancy villa," wrote the attorney in his statement to the court. "The bank froze this money and refused to allow Antoinette Khoury-Makhoul to carry out any transaction with it. The bank was obligated to invest the money and maintain its value, not to let it sit like an old stone. The bank used this money for its own purposes, but took the profit for itself, never crediting the account."

"The claim was submitted in light of the new situation created by the signing of a peace treaty between Israel and Jordan. Now that the countries are no longer at war, litigation of this kind is possible," Attorney Makhoul explained to Haaretz.

"There are world-wide codes of law governing civil and financial disputes between citizens and organizations of different countries, and associations of Holocaust survivors have filed suits against Swiss banks on this same legal basis." The Makhoul family has a collection of newspaper clippings about the legal battles being fought by Holocaust survivors in the United States against banks in Switzerland.

Asked if the battle he is waging through the Israeli courts against an Arab bank owned by Palestinians has not led to accusations that he is betraying his people, Naim Makhoul says: "Absolutely not. I only want what is coming to me, and to hundreds and maybe thousands of Palestinians who clung to their land and are unfortunately being taken advantage of by the bank."

According to Haaretz, Arab Bank's legal representatives have asked the Haifa court to dismiss the suit out of hand. Attorneys Yaakov Sharvit and Ran Tal have raised procedural objections, arguing that the courts in Israel have no judicial authority over the bank. Arab Bank, they say, does not have a single branch, office or agency within the borders of the State of Israel. It is not registered as a foreign corporation, and the claim is no longer valid under the statute of limitations – Albawaba.com